Since the first publication of this book in 1952, the role of the controller has greatly expanded. It has moved from that of a simple technician who must properly process transactions to a business executive with a wide-ranging knowledge of total business operations, best practices, and corporate strategy. To address these changes, Controllership has evolved into a comprehensive guide to accounting management, planning, computer systems, and administration—in short, a repository for all the skills that a modern controller needs. While the sixth edition addressed such key issues as the fast close, best practices, information security systems, outsourcing the accounting function, and software testing, we felt it necessary to issue a new edition that addresses a wide range of addi- tional topics that have become more important in the last four years
Janice M. Roehl-Anderson, MBA, is a principal with Deloitte, with over 20 years of consult- ing experience. She specializes in information systems security; financial and cost accounting system analysis, design, selection, and implementation; long-range information systems plan- ning; and information management reviews/audits. She has also worked for US West. In addi- tion to earning her BA in Business at the University of Washington, and MBA in Accounting and Information Systems at the University of Southern California, Jan has successfully com- pleted the CPA exam, and has co-authored over 10 books, including The Controller’s Function: The Work of the Managerial Accountant.
Steven Bragg, CPA, CMA, CIA, CPIM, has been the chief financial officer or controller of four companies, as well as a consulting manager at Ernst & Young and auditor at Deloitte. He received a master’s degree in finance from Bentley College, an MBA from Babson College, and a Bachelor’s degree in Economics from the University of Maine. He has been the two-time President of the 10,000-member Colorado Mountain Club, and is an avid alpine skier, moun- tain biker, and rescue diver. Mr. Bragg resides in Centennial, Colorado.
Before a controller can delve into the specifics of the controller job description, it is first necessary to determine how the accounting function fits into the rest of the organization. This used to be a simple issue; the accounting staff processed transactions to support business operations—period. This required a large clerical staff managed by a small cadre of people trained in the underlying techniques for processing those transactions. In this environment, the stereotypical image of an introverted controller pounding away at a calculator was largely accurate.
The role has undergone a vast change in the last few decades, as technological improvements, the level of competition, and a shifting view of management theory have resulted in a startlingly different accounting function. This section describes how the accounting function now incor- porates many additional tasks, and can even include the internal auditing and computer services functions in smaller organizations. It then goes on to describe how this functional area fits into and serves the needs of the rest of the company, and how the controller fits into the accounting func- tion. Finally, there is a discussion of how ethics drives the behavior of accounting employees, and how this shapes the way the accounting staff and controller see their roles within the organization.
In short, this chapter covers the high-level issues of how the accounting function and its con- troller fit into the modern company, not only to process its transactions, which was its traditional role, but also to provide additional services.
The accounting function has had sole responsibility for processing the bulk of a company’s trans- actions for many years. Chief among these transactions have been the processing of customer bill- ings and supplier invoices. Though these two areas comprise the bulk of the transactions, there has also been a long history of delegating asset tracking to the accounting function. This involves all transactions related to the movement of cash, inventory, and fixed assets. Finally, the accounting staff has been responsible for tracking debt, which can involve a continuous tracking of debt levels by debt instrument, as well as the payments made to reduce them. These have been the transaction- based activities of the accounting staff.